Despite the Federal Government’s directive, NNPC remains the sole off-taker of petrol from the Dangote refinery, delaying market competition.
Despite the Federal Government’s recent directive permitting oil marketers to load petrol directly from the Dangote Petroleum Refinery, the Nigerian National Petroleum Company Limited (NNPC) remains the sole off-taker of Premium Motor Spirit (PMS) from the plant.
This situation persists due to an ongoing agreement between NNPC and the $20bn Lekki-based refinery.
Also read: Dangote refinery crude oil production to begin by Late 2024
Oil marketers disclosed on Wednesday that NNPC would continue to hold the exclusive right to lift PMS from the Dangote refinery until its agreement with the plant terminates.
However, neither the marketers nor officials from NNPC and Dangote refinery could provide a clear timeline for when this agreement would end.
The Federal Government had, on October 11, 2024, announced a new policy intended to liberalise the downstream petroleum sector.
According to the Ministry of Finance, oil marketers could now negotiate the direct purchase of petrol from local refineries, including the Dangote plant, without relying on NNPC.
The government statement read, “Petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC.
Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency.”
However, following a meeting with the Dangote refinery officials on October 15, 2024, members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) revealed that NNPC’s role as the sole off-taker remained in effect.
The meeting, attended by IPMAN’s National Vice President, Zonal Chairman of the Western Zone, and other members, confirmed that the agreement between NNPC and Dangote was still operational.
The Zonal Chairman, South-West, Dele Tajudeen, issued a notice to IPMAN members stating, “We had a fruitful discussion with the Dangote Group, and it was confirmed that while the Ministers of Finance and Petroleum Resources have directed the commencement of sales to marketers, a pending agreement with NNPC must be resolved first. Until this is done, direct sales will remain on hold.”
IPMAN’s National Executive Council is set to hold a meeting in Abuja to discuss this development. The association also urged marketers who have yet to register with the Dangote refinery to do so quickly, as only registered members would benefit from the future lifting of petrol from the facility.
Major oil marketers have also confirmed that they are currently lifting products from the Dangote refinery through the existing NNPC deal.
A major marketer, speaking anonymously, said, “There is a subsisting deal between NNPC and Dangote refinery, and it is based on that deal that we are lifting PMS from the refinery using a proforma invoice.”
At present, neither NNPC nor the Dangote refinery has responded to requests for comment on the ongoing exclusivity of the deal and when it might conclude.
The situation has raised questions about market liberalisation and competition, as the Federal Government’s directive aimed at promoting efficiency has yet to take full effect.
